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Leasing a vehicle is a common choice for many drivers throughout California. When a driver leases a vehicle, they can drive a car from a dealership for a set period of time while making monthly payments, rather than purchasing and owning the vehicle outright. The vehicle is typically owned by the leasing company or dealership throughout the lease term, which can create additional insurance and financial obligations and considerations if there is an accident.
Driving a leased vehicle comes with many of the same responsibilities as owning a car outright. Still, the financial and insurance issues after a crash can be very different, especially if a car is deemed totaled. A leased car accident in California may involve:
- The driver’s personal insurance company
- The at-fault driver’s insurer
- The leasing company
- Questions about the remaining value of the lease
If you have suffered injuries in a collision involving a leased vehicle, understanding how these issues work can help you make informed decisions on how to pursue compensation for your injuries while protecting your rights.
At Levinson Law Group, our team of leased car accident lawyers in California represents injured victims throughout San Diego, Carlsbad, and surrounding communities. While we do not handle property damage claims by themselves, we help people who have been injured in car accidents that involve leased vehicles pursue compensation for their damages caused by the negligence of another person or party while also working to resolve the insurance issues that often arise after a serious crash.
What Happens If A Leased Vehicle Is In An Accident in California?
A leased car accident is generally handled much like any other collision from an insurance perspective. California drivers are required to carry various types of insurance with minimum amounts of financial coverage. One type of insurance that is mandatory is liability insurance, and most leasing companies also require drivers to have collision and comprehensive coverage throughout the term of the lease.
After an accident, the insurance company typically investigates the accident, determines fault, and evaluates the damage to the leased vehicle. If the vehicle can be safely repaired, the insurance company may pay for repairs according to the applicable insurance policy terms and conditions. Because the leasing company technically owns the vehicle, it may have specific repair requirements, including having to use approved vehicle repair providers or original manufacturer parts in certain situations.
Even after repairs are completed on the vehicle, drivers should continue making their monthly lease payments unless the leasing company provides other directions on what to do. It’s important to understand that an accident does not automatically end a lease agreement simply because the vehicle has been damaged.
When injuries are involved in a leased car accident, a separate personal injury claim may also be pursued against the at-fault driver or party responsible for causing the crash. Compensation for bodily injuries is generally handled independently from the vehicle damage portion of the claim when a leased car is involved.
Leased Car Accident, Not My Fault: What’s Next?
A lease car accident not my fault situation often creates uncertainty because many drivers assume they will not have to deal with the financial consequences of the accident. While the at-fault driver’s insurance may ultimately be responsible for paying damages that are covered under the specific policy, the claims process can still take time.
If your leased vehicle is repairable, the insurance companies generally work through the property damage claim while your lease continues, and you continue to provide monthly payments. Depending on the circumstances, you may also have access to rental vehicle benefits through either your own insurance policy or the at-fault driver’s insurance.
If you have sustained injuries during a lease car accident that was not your fault in California, you may also have the right to pursue compensation for other damages such as:
- Medical expenses
- Future medical treatment
- Lost wages
- Reduced earning capacity
- Pain and suffering
- Emotional distress
- Other accident-related losses allowed under California law
At Levinson Law Group, our main goal is to represent injured accident victims who have been injured due to the negligence of another person or party. We work diligently to recover compensation for the physical, emotional, and financial harm that was caused to our client while also managing communications and negotiations with the insurance companies and at-fault parties throughout the injury claim process.
Leased Car Totaled, Not At Fault: What Are Your Rights?
A leased car totaled in a not-at-fault claim can become more complicated than when repairable damage is sustained. When a leased vehicle is declared a total loss, the insurance company typically determines the value of the vehicle directly before the accident and then pays that amount, rather than the remaining balance owed on the lease.
Because leased vehicles often depreciate faster than the lease balance decreases, there may be a gap between what the insurance company pays and what is still owed to the leasing company, which the driver will have to pay. This difference is sometimes referred to as a deficiency or negative equity on the vehicle.
Even when the accident was entirely someone else’s fault, paying for the difference between the car’s cash value and what is owed on the lease may depend on several factors, including:
- The insurance policies involved
- The lease agreement
- Whether gap insurance applies
For injured accident victims in California, the total loss of the vehicle is only one part of the overall car accident claim. Medical treatment, rehabilitation, time away from work, and other personal injury damages are often included and typically represent a much larger portion of the financial impact after a serious collision.
What To Do If My Leased Vehicle is Totaled in California?
A leased vehicle totaled determination from an insurance carrier typically means the insurance company has concluded that repairing the vehicle would not be economically reasonable based on its value and what the total repair costs would be. When this happens, several steps usually occur, including:
- The insurance company determines the vehicle’s actual cash value.
- The leasing company receives payment because it owns the vehicle.
- Any remaining lease balance is evaluated.
- The lease is typically terminated after the financial obligations are resolved.
Depending on the lease agreement, there may also be fees or charges as part of the lease agreement that become relevant when the lease ends due to a total loss. Every leasing contract is different, which makes it important to understand the specific terms that apply to your vehicle in the event an accident occurs.
For accident victims who have sustained injuries, resolving the vehicle portion of the claim should not distract from pursuing appropriate medical care and fair compensation for the injuries caused by the collision.
Understanding Gap Insurance for Leased Vehicles
Gap insurance can play an important part after a serious leased car accident in California, particularly when the vehicle is declared a total loss.
Gap insurance is not mandatory under California law, but many dealerships that lease or finance vehicles require it. It is designed to help pay the difference between a vehicle’s actual cash value and the remaining amount owed under the lease or loan if the insurance settlement does not fully satisfy what is owed. Since vehicles often lose value quickly during the first several years of being leased, this difference can sometimes be substantial and seriously impact an accident victim’s financial stability.
Some lease agreements include gap protection automatically, while others require it to be purchased separately under the driver’s own insurance policy. Not every insurance provider in California offers gap insurance as part of its policies, and availability can vary depending on the insurer and the type of lease agreement that the driver has. Because of these differences, it is important for drivers to review their lease documents and insurance policies to understand whether gap coverage applies to their leased vehicle.
Gap insurance typically covers only the remaining financial obligation related to the vehicle itself. It does not provide compensation for other damages caused by the accident, such as medical expenses, lost income, pain and suffering, or other personal injury damages resulting from the accident.
How Levinson Law Group Helps Injured Victims After a Leased Car Accident in California
A leased car accident can involve several parties, including insurance companies and the leasing company, which can make the claims process more complicated than many drivers expect. This can be hard to handle alone, especially while trying to recover from injuries sustained in the accident at the same time. While property damage and lease obligations are important to understand and adhere to, serious injuries often have the greatest long-term impact in leased car accidents. Our team at Levinson Law Group represents injured victims throughout San Diego, Carlsbad, and surrounding California communities who have been injured in accidents involving leased vehicles. Our firm’s main goal is to help accident victims recover compensation for medical expenses, lost wages, future medical care, pain and suffering, and other losses that were caused by another person’s negligence.
If you were injured in a leased car accident that was not your fault in California, are dealing with a leased car totaled not-at-fault situation, or your leased vehicle was totaled because of another driver’s negligence, our legal team is always ready to help. We investigate the accident, gather evidence, handle negotiations with the insurance companies, and work diligently to pursue the maximum compensation available under California law so you can focus on your recovery.